OK folks, I've attached (3) pics for review. First, this master cylinder is new with only about 500 miles on the car. Should this piston be sitting "out" like this at the end? Second, I've attached pics of the service manual for 69 that indicate the measurement for the push rod (the third shot). It also mentions it on the page that references the disc brake booster (that's the second shot).

Anyone care to comment on the adjustment and/or if the piston should be hangin out like this?